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Councils take their cash out of Santander

Arlingclose sais that council deposits with Santander UK had fallen from £700 million to £400 millionSimon Dawson/Getty

Councils have been taking millions of pounds out of British Santander branches because of fears about the weakening Spanish economy.

Arlingclose, an investment adviser to a fifth of Britain’s 450 councils, said that deposits with Santander UK had fallen from £600 million to £400 million since 2010.

It said that while some local authorities were still banking with the owner of the former Abbey National, others were “excluding it altogether, given the deterioration in Spain’s economic position”.

Yesterday, representatives from the bank met officials from Kent County Council after the authority withdrew about £3 million. John Simmonds, chief executive of the council, said the decision had been taken after the Spanish Government introduced measures to shore up the country’s banking sector.